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Old 11-21-2016, 11:20 AM
 
625 posts, read 381,197 times
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I just got a severance package,

You should shoot for one month pay for every years employed, medical at Employee rate two months for every year worked, out placement services up to one year, prior unvested bonus and LTI paid out, prorated payout of future bonus and LTI and 401K match.

The retirement funds dont touch and figure out best tax free way to roll it over to something.
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Old 11-21-2016, 12:48 PM
 
6,875 posts, read 7,267,992 times
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OP here, perhaps I should have provided more info.

Yes I am over 55, and I do know about the rule of 55 -- so I will not be rolling my 401K into an IRA.
I MUST stay with this job until March first to get the package. My 401K is with the same low cost mutual fund company where my Roth IRA already is. So that's all in one house so to speak. Keeping the 401K where it is, I can tap my 401K incrementally if I desire, which I won't need to do, because of other resources available. After I'm separated, there might be some administrative option to get them titled as personal account versus employer plan. But The monies are already in the exact same funds and same mutual fund company were they'd be anyway. So I don't know of an overwhelming reason to worry about "keeping the 401K with the company plan, only "terminated/inactive."

I HOPE to have a new job lined up to start no more than a month after leaving my current employer. I'm already putting feelers out. And I'll take anything that provides health care, I also don't have to make what I'm making now.
The sooner I get employed, the less money goes to COBRA, and the more of this windfall stays in my pocket.

I'm embracing the change. I've obsessed about retiring (which this is not) for more than a year. So I'm ready. With more than a year's emergency fund already. So I'll have no mortgage, no consumer debt, the severance package, and proceeds from a home sale on top of 401k -- AND eventually a pension (which I'm not tapping now because it would be reduced by almost 50%. So, just like with Soc Sec, the longer I hold off on that before 65 the less and reduction might be. I can always change my mind at the reduction gets less.)

Since starting the thread I've talked to my accountant, haven't reached my financial planner yet.
I'm going to ask HR, to confirm whether or not they'll put some of the sewerage into the 401K up to the 24K limit for us (those of us who are leaving). I THINK I heard them so no. But it can't hurt to ask again.

More advice, suggestions, words of wisdom always welcome….
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Old 11-21-2016, 12:57 PM
 
6,212 posts, read 4,718,283 times
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Quote:
Originally Posted by selhars View Post
........
The sooner I get employed, the less money goes to COBRA, and the more of this windfall stays in my pocket.

.........
You could also opt for Obamacare. When I retired, it was pretty much COBRA or nothing. I had 6 months of retirement before I qualified for Medicare. I also learned I could apply for COBRA at any time during the first 6 months of retirement and it would be retroactive from my first day of retirement. I escaped without needing medical care. Otherwise I would have enrolled if needed.
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Old 11-21-2016, 11:57 PM
 
6,875 posts, read 7,267,992 times
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^^ I'd rather not do Obamacare, or whatever it will eventually be called….Trumpcare?
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Old 11-22-2016, 01:50 AM
 
506 posts, read 267,495 times
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OP - it sounds like you work for IBM. I did, and left in the bloodletting of 2009. It was one of the best things that happened to me.
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Old 11-22-2016, 08:42 AM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
22,537 posts, read 39,914,033 times
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OP, Do you have a 'lump sum' distribution apart from 'qualified plans'?

Sounds likely.

If so... do you ever plan to be in business for yourself?
I used the Section 179 for my Distribution at age 49, thus deferring my 'taxable event' into capital equipment for a business.
Careful, there were some changes coming to 179, so know the current (2017) rules. Similar using 'investment credit' (Where available).

We also use a 'Donor Advised Fund' and a family foundation to transfer appreciated assets to future charitable giving, but to incur CURRENT deductability. (as appropriate to earnings / taxes).

We also frequently use 1031 Like-kind exchanges, but I 'realized' gains on most of that stuff during low tax yrs. (like the yr AFTER you take EER . RIF / 'retrenchment')
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Old 11-22-2016, 08:50 AM
 
13,872 posts, read 7,381,208 times
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If it were me, I'd do COBRA for the first 18 months unless it was stupidly more expensive than ACA. There's no telling what will happen with ACA.
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Old 11-22-2016, 12:12 PM
 
6,875 posts, read 7,267,992 times
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OP Here,
When Obamacare started I noticed that when I called to make a doc appointment the receptionist would ask the obvious "do you have insurance" question. Me: "yes." Then came "is it through your JOB?" And when I said yes…it wasn't an OBVIOUS reply of, "oh, OK" -- BUT…I wonder if they were screening "just to know" if the coverage might be through ACA. Now, granted she didn't ask if it WAS ACA, but once you say it's through your job they know it's not an exchange policy. Clearly I don't know what her NEXT espouse would have been if the insurance had NOT been through my job. I just found it interesting that all my doc offices starting asking that.

Aside from that Id just rather not deal with exchange coverage.

I'm leaving a well-paying, high stress, fairly high-profile, white collar job.

And I guess it's touch on sometimes in other threads…but I really don't want to do exactly what I was doing. Other than not work at all for six months….to be honest, I want a veg out job, whereI can put my headphones on and just be on auto-pilot.

Of course I say that NOW -- but if I get that kind of "lower level" job how would I REALLY take to it. Ideally I want a federal, state, municipal, or major employer gig that I can work for only 8 more years to get me to 65. And I MIGHT just be willing to do something "beneath my pay grade" to get it.

Anyway, I'm still employed until March…..I've sent out two applications already. Because I'll have nor mortgage -- I CAN afford to make less money….so we'll see…..
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Old 11-22-2016, 12:14 PM
 
625 posts, read 381,197 times
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Quote:
Originally Posted by jrkliny View Post
You could also opt for Obamacare. When I retired, it was pretty much COBRA or nothing. I had 6 months of retirement before I qualified for Medicare. I also learned I could apply for COBRA at any time during the first 6 months of retirement and it would be retroactive from my first day of retirement. I escaped without needing medical care. Otherwise I would have enrolled if needed.
Or ask for Cobra at the employee rate. Lots of companies in a serverance agreement do that.
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Old 11-22-2016, 01:14 PM
 
6,875 posts, read 7,267,992 times
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As a group they're giving us just what the contract says they have to.
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